A Coachella Valley lender is trying to entice buyers with the promise of getting into a home with a tiny down payment — or none at all.

They're not the kind of zero-down loans lenders offered in the years leading up to the housing market's 2008 crash. But with clever stacking of programs, they allow people to buy houses without putting down much, if any, cash.

Mark Stewart, sales manager for Axia Home Loans, a lender that recently opened an office in Palm Desert, explained that first-time homebuyers can qualify for FHA loans, which only require them to pay 3.5 percent of the home's purchase price up front.

Then, they can get a "non-repayable grant" from the Golden State Finance Authority or the California Housing Finance Agency, state agencies that support residents trying to buy homes, for as much as 5 percent of the loan amount — enough to cover the remainder of the down payment and most if not all closing costs.

"A lot of times (people think) you've got to save $10,000 before you can get into a home," Stewart said. He asks realtors, "Do you have any borrowers that just don't have enough of a down payment to buy a house? Do you have borrowers waiting to save up for a down payment? ... In this case they don't have to."

Zero-down loans were commonplace in the mid-2000s. In hindsight, most experts agree that many of the people who qualified shouldn't have — and many of them foreclosed on their homes.

Buy Photo

A one bedroom micro home in Palm Springs. This model house is part of micro home development in Palm Springs at the Palm Springs Mobile Club and is touted as the first "tiny home" neighborhood in SoCal. The home are between 600 to 1000 square feet. Photo taken on June 16, 2017.(Photo: Richard Lui/The Desert Sun)

Stewart insists he and other lenders are much more wary today. Axia's program requires a credit score of 640 and approval from an "automated decision-making engine," as well as personal approval from the lender. FICO announced in July that the U.S.'s average credit score was 700.

"Yeah, there's always risk," Stewart said. "The likelihood of you (walking) away from something you never put your money into is greater, I agree with that, but I think the people buying these homes want to buy."

Other lenders in the desert that offer the Golden State Finance Authority's down payment assistance include Castle & Cooke, Franklin Loan Center, loanDepot, Summit Funding and Wells Fargo, according to a list of participating lenders.

But most are wary of advertising them as cost-free loans.

"We do not offer zero-down or zero-cost loans with the exception of a VA program for qualified veterans," Chief Retail Production Officer Dan Hanson wrote in an email. "With that said, loanDepot works with hundreds of bond programs, including grants that do not require repayment, to help qualified consumers minimize down payment and closing costs.

Interest rates on these loans are also slightly higher than market rate, Stewart said, and can vary from one applicant to another.